Item 1.01 Entry into a Material Definitive Agreement.
On June 2, 2016, Casella Waste Systems, Inc. (the Company) completed a financing transaction pursuant to which the Company
incurred indebtedness in the aggregate principal amount of $15.0 million. The transaction involved the issuance by New York State Environmental Facilities Corporation (EFC) of $15.0 million aggregate principal amount of its Solid Waste
Disposal Revenue Bonds (Casella Waste Systems, Inc. Project) Series 2014R-2 (the 2014R-2 Bonds).
The 2014R-2 Bonds were
issued on June 2, 2016 pursuant to the Indenture, dated as of December 1, 2014, by and between U.S. Bank National Association, as trustee (the Trustee), and EFC (the Indenture). The proceeds of the offering of
2014R-2 Bonds were loaned by EFC to the Company to finance or refinance certain capital projects in New York, and to pay certain costs of issuance of the 2014R-2 Bonds pursuant to a Loan Agreement, dated as of December 1, 2014, with EFC (the
Loan Agreement). The Loan Agreement requires the Company to satisfy the obligation to pay amounts from time to time owing with respect to the Bonds issued by EFC. The 2014R-2 Bonds were issued at the initial term interest rate period of
ten years (ending June 1, 2026) at the initial rate of 3.125% per annum. On December 18, 2014, Solid Waste Disposal Revenue Bonds (Casella Waste Systems, Inc. Project) Series 2014 in an aggregate principal amount of $25 million (the
2014 Bonds and collectively with the 2014R-2 Bonds, the Bonds) were issued under the Indenture, and the proceeds of the offering of the 2014 Bonds were loaned to the Company, subject to the terms of the Indenture, the Loan
Agreement and related documents.
The Bonds will mature, subject to earlier optional and mandatory redemption, on December 1, 2044.
In addition, on June 1, 2026, with respect to the 2014R-2 Bonds, on December 1, 2019, with respect to the 2014 Bonds, and any other conversion date of any new interest rate period for the applicable Bonds and on certain other dates
specified in the Indenture, each holder of the applicable Bonds is required to tender such Bonds held by it for purchase and such Bonds are required to be purchased. Merrill Lynch, Pierce, Fenner & Smith Incorporated, as remarketing agent
for the Bonds, is required to use its best efforts to remarket any Bonds tendered for purchase. After the end of the applicable initial term interest rate period, and at certain other times specified in the Indenture, the Bonds may be converted to a
variable (daily or weekly) interest rate period or may remain in a term interest rate period. The interest rate on the Bonds will be reset at the end of each interest period.
During the applicable initial term interest rate period, the Bonds are guaranteed by certain subsidiaries of the Company pursuant to an
Amended and Restated Guaranty Agreement, dated as of June 1, 2016, among the guarantors named therein and the Trustee and entered into by the parties thereto on June 2, 2016 (the Guaranty). Pursuant to the Guaranty, each
guarantor will guarantee to the Trustee for the benefit of the owners and beneficial holders of the Bonds, for the applicable initial term interest rate period, the full and prompt payment of (i) the principal of and redemption premium, if any,
on the Bonds when and as the same become due; (ii) the interest on the Bonds when and as the same become due; (iii) the purchase price of Bonds tendered or deemed tendered for purchase pursuant to the Indenture; and (iv) all loan
payments and purchase price payments due or to become due from the Company under the Loan Agreement (collectively, the Guaranteed Obligations). The obligations of each guarantor under the Guaranty will, subject to the release provisions
contained therein, remain in full force and effect until the entire principal payment of, redemption premium, if any, and interest on or purchase price of the Bonds has been paid or provided for according to the terms of the Indenture and all other
Guaranteed Obligations have been paid and satisfied in full.
The Bonds are issued as tax exempt bonds. If the Company or EFC, as
applicable, does not comply with certain of their covenants under the Indenture or Loan Agreement, or if certain representations or warranties made by the Company in the Loan Agreement or in certain related certificates of the Company are false,
then the interest on the Bonds may become includable in gross income for federal income tax purposes, retroactively to the date of original issuance of such Bonds. If the Bonds are declared to be taxable or the Loan Agreement is determined to be
invalid, the Indenture provides that the Bonds are subject to mandatory redemption at a redemption price equal to 100% of the principal amount thereof, without premium, plus accrued interest to the date of redemption.
A copy of the Guaranty is filed as Exhibit 4.1 to this Current Report on Form 8-K and is
incorporated herein by reference as if fully set forth herein. The description of the Guaranty set forth above is qualified in its entirety by reference to the full text of the Guaranty filed herewith.